Entrepreneurs with glamour? DEA performance characterization of high-tech and older-established industries

The development of high-tech industries for competitiveness is an important issue for government policy-makers. Prior work by scholars concentrates disproportionately on the modern economies conventionally classified as high technology, and underestimates the importance of the older-established sectors that comprise the bulk of economic activity. This study examines the managerial performance efficiency of 367 manufacture firms in Taiwan utilizing the two-stage data envelopment analysis technique. The empirical results indicate that the scale of the firms does play an important role in influencing the operating efficiency. One can increase the firm's performance by consolidating with other smaller units to achieve the optimal size. By employing a profitability/marketability matrix, this study better characterizes the operating performance of the firms. The result of this study has a broader implication in that prior studies neglect these older-established sectors in terms of their current performance and future development. This finding in turn reflects a major distortion in views about the roles of research and development and technological upgrading in modern regional economies as a whole.

► We examined the managerial performance efficiency utilizing the two-stage DEA. ► Firms' scale played an important role in influencing the operating efficiency. ► We better characterize the performance using a profitability/marketability matrix. ► There existed a view distortion about the roles of R&D and technological upgrading.